057 CM Chapter 4 Test 2024 (Debt)

Front

Which of the following is a factor in determining a FICO score?
Options:
Payment history of your electric bill,
Making the payment for your Credit card on time,
Paying cash for all purchases,
The square footage of your house

Back

Making the payment for your Credit card on time

Front

Which of the following is not a good idea for getting out of debt?
Stop borrowing money
Work a part-time job or take overtime at the job you already have
Sell something
Borrow against the equity of your house

Back

Borrow against the equity of your house

Front

Which of the following things cannot be done with a debit card but can be done with a credit card?
Go into debt, Rent a car in San Diego, Purchase a blender from Amazon.com, Buy an airline ticket to Tokyo

Back

Go into debt

Front

What factors affect a credit score? Options: Type of debt, New Debt, Duration of Debt, All 3 of these things affect a credit score

Back

All 3 of these things affect a credit score

Front

Which of the following is the most cost-effective option for purchasing a home? Options: Get a 30-year fixed rate mortgage with a 5% down payment. Get a 30-year variable rate mortgage so that you can get the lowest possible payments. Get a 15-year, fixed rate mortgage with a down payment of 20%. Get a 20-year variable rate mortgage with a 20% down payment. Get a 15-year, fixed rate mortgage with a down payment of 10%.

Back

Get a 15-year, fixed rate mortgage with a down payment of 20%.

Front

How does the debt snowball method of getting out of debt work?

Back

List your debts in order from smallest to largest balance and focus on paying the smallest debt off first.

Front

What is paycheck garnishment?

Back

When the court system allows a lender to take money owed directly from a borrower's paycheck.

Front

Which of the following best summarizes how the use of a credit card for purchases instead of cash can change oneʹs spending behavior? Options: Studies show that spending behavior does not matter as long as you pay off the credit card balance each month., Studies show that there is no change in spending behavior whether a person uses cash or credit., People typically spend less when they know that they are earning credit card ʺrewards.ʺ, Studies show that consumers typically spend less when using cash as opposed to credit card purchases.

Back

Studies show that consumers typically spend less when using cash as opposed to credit card purchases.

Front

Which of the following is not a credit myth?
The lottery and other forms of gambling will definitely make you rich.
You are doing a great job financially once you get approved for a credit card.
Ramsey believes debt is a tool and should be used to create prosperity.
Borrowing money can cost you a lot of money because of interest and the increased probability of overspending

Back

Borrowing money can cost you a lot of money because of interest and the increased probability of overspending

Front

If you do not have a FICO score, what factors will determine whether or not you qualify for a mortgage?

Back

History of rental payments, utility payments, employment history, and your down payment.